US Senate Committee On Banking, Housing, & Urban Affairs Weighs In On Virtual Currency

In the second hearing in as many days the US Senate Committee on Banking, Housing, and Urban Affairs weighed in on virtual currencies. Tuesday’s hearing featured some of the speakers we saw at Monday’s hearing as well as several new testimonies. The full video (minus the first few minutes) is available via the below youtube video. The hearing, entitled The Present And Future Impact Of Virtual Currency, covered potential issues related to use and regulation or non regulation of virtual currencies.


Prior to the beginning of the hearings Senator Moran took to the Bitcoin subreddit to get the community’s take on the value and viability of Bitcoin. The move by Senator Moran was well received by the Bitcoin community who appeared to be generally pleased by the Senator’s attempt to gain knowledge and perspective on the topic prior to the hearings.

Perhaps the most notable testimony was that of Tony Gallippi, CEO of Bitpay, who made a very convincing case for the potential economic benefits of Bitcoin. Mr. Gallippi also discussed Bitpay’s software as a service model and how merchants can greatly reduce fees associated with payment processing by using Bitcoin and services like Bitpay. Most of the senators seemed to remain receptive to the potential of Bitcoin and virtual currencies save one or two who attempted to associate virtual currencies with more nefarious activities.

The former onion site Silk Road came up several times, specifically Mr. Schumer asserted his previous intention to shut down the site. However, Senator Schumer also clarified that he did not intend to shut down Bitcoin or promising technologies, but rather illicit trading on sites such as Silk Road.

Of the people on panel 2, Ms. Mercedes Kelley Tunstall seemed to be the only one with the intent of making a case against Bitcoin and possibly the case for other virtual currencies. Specifically she recommended removing the anonymity of Bitcoin and seemed to suggest that other virtual currencies could be designed without anonymity.

“So I would say that in order to address the excesses that we are seeing with virtual currencies where it is being used by criminals and terrorists and money launderers today, we do know that that is occurring, that the anonymity part of it, let’s let that go.” – Mercedes Tunstall

Earlier in the hearing Senators and members of panel 1 had discussed that there was no record of connection between terrorist activity and Bitcoin that was part of the public domain, though they alluded to discussing the topic off the record. As pointed out by Jerry Brito on twitter, Ms. Tunstall later went on to include herself when discussing another virtual currency, Ripple, indicating that she may have some association with Circle, the company formed around Ripple.

“There’s also a virtual currency called Ripple that has uh has started very differently from Bitcoin and started with the premise we are operating in an existing financial ecosystem and we need to figure out, you know be able to comply with the criminal laws and the anti money laundering laws that are in place.” – Mercedes Tunstall

Conclusions

Overall both the hearings by the Homeland Security Committee and this hearing have been taken as being positive for Bitcoin. While there was significant mention of the illicit use of Bitcoin, the potential economic benefit of Bitcoin seems to have won out.